Underground Crypto Trading in Cambodia: How Scam Compounds and Criminal Networks Operate

Posted By Tristan Valehart    On 14 Jun 2026    Comments (24)

Underground Crypto Trading in Cambodia: How Scam Compounds and Criminal Networks Operate

Imagine losing your life savings to an investment platform that looks exactly like Binance or KuCoin. You deposit funds, watch fake profits climb, and then realize the "exchange" doesn’t exist. It’s a nightmare scenario that has become all too common for thousands of victims targeted by underground crypto trading in Cambodia, which is a sophisticated criminal ecosystem involving human trafficking, forced labor, and massive money laundering operations. This isn't just about shady deals; it's about organized crime networks that have turned Southeast Asia into a hub for financial fraud.

The situation in Cambodia is unique. Unlike other countries where crypto might be used for privacy or speculation, here it serves as the primary tool for transnational criminal organizations. These groups don't just trade Bitcoin; they run entire industries built on deception, violence, and exploitation. If you are looking to understand how these operations work, why they thrive despite bans, and what the recent crackdowns mean, this guide breaks down the reality behind the headlines.

Key Takeaways

  • Cambodia’s underground crypto market is dominated by criminal syndicates like the Prince Group and Huione Guarantee, which launder billions through scam compounds.
  • The National Bank of Cambodia (NBC) banned crypto in 2019 but shifted to a licensing system in late 2024, inadvertently creating new loopholes for criminals.
  • Victims often lose everything after being lured by fake investment platforms that mimic legitimate exchanges.
  • Recent U.S. Justice Department actions in late 2025 have seized billions in assets, signaling a major international crackdown.
  • Despite enforcement, the network remains resilient, adapting to encrypted channels and cross-border transactions.

From Ban to Boom: The Regulatory Vacuum

To understand why Cambodia became a hotspot for illicit crypto activity, we have to look at its regulatory history. In 2019, the National Bank of Cambodia (NBC) issued Directive No. 1125, which effectively banned all cryptocurrency transactions within the country. On paper, this was meant to protect citizens from volatile digital assets. In practice, it created a black market.

When something is banned but still in demand, people find ways around it. According to Standard Insights' 2025 report, 10.63% of Cambodians continued using cryptocurrency even during the prohibition period. But this wasn't everyday people buying Bitcoin for savings. It was criminal operators setting up infrastructure. The ban pushed legitimate businesses away but left the door wide open for those who didn't care about legality.

Then came a twist. In late 2024, the NBC introduced Prakas B7-024-735 Prokor, which is a permission-based licensing system designed to regulate crypto activities rather than ban them outright. While intended to legitimize the market, this shift had an unintended consequence. It gave sophisticated money launderers a veneer of legitimacy. They could now operate under partial regulatory cover, making their illicit flows harder to distinguish from legal ones. This regulatory whiplash-first a total ban, then a sudden opening-allowed entrenched criminal networks to deepen their roots before authorities could react.

The Anatomy of a Scam Compound

If you think of underground crypto trading as just computers and code, you’re missing the most disturbing part: the human element. At the heart of Cambodia’s crypto crime scene are scam compounds, which are fortified facilities where trafficked workers are forced to perpetrate cryptocurrency investment fraud under threat of violence. These aren't remote call centers; they are prisons disguised as offices.

The Prince Group, led by Chen Zhi, operates some of the largest of these compounds. Locations like the 'Jinbei Compound' in Sihanoukville and the 'Golden Fortune Science and Technology' center in Chrey Thom function as violent forced labor camps. Workers are trafficked into the country with promises of high-paying jobs, only to find their passports confiscated and their freedom stripped away.

Inside, these workers face 18-hour days. Their job? To contact potential victims via messaging apps, pretending to be successful investors. They use scripts to lure targets into fake platforms that mimic real exchanges. If a worker fails to meet daily fraud quotas, they face physical punishment. This system turns human beings into tools for extraction. The U.S. Department of Justice identified these compounds in a civil complaint filed on October 14, 2025, highlighting the scale of the operation.

Workers trapped in grim scam compound offices

Huione Guarantee: The Money Laundering Engine

You can’t have a scam without a way to move the stolen money. That’s where Huione Guarantee (Huiwang Group) comes in. Founded in 2014, this entity acts as the plumbing for Cambodia’s underground economy. Chainalysis data reveals that Huione laundered at least $4 billion between August 2021 and January 2025.

Where did this money come from? It’s a mix of dirty sources:

  • $37 million from North Korea-linked cyber thefts.
  • $36 million from virtual currency investment scams.
  • Approximately $300 million from other cybercrime activities.

Huione established what Elliptic described as a 'one-stop crime platform' on Telegram. Before Telegram blocked these services in May 2025, third-party vendors on the platform offered technology tools, personal information, and money laundering services specifically targeting crypto fraud rings in Southeast Asia. Now, they’ve moved deeper into encrypted channels, but the flow hasn’t stopped.

Data from South Korea’s Financial Supervisory Service shows the sheer volume of this activity. Transfers between five major Korean cryptocurrency exchanges and Huione Guarantee reached 12.8 billion won ($8.9 million USD) in 2024. That’s a 1,400-fold increase from the same period in 2023. Even as scrutiny increased in late 2024, transactions continued to grow, hitting 3.15 billion Korean Won by October 2025. This resilience shows how deeply embedded these networks are in the global financial system.

How the Fraud Works: A Victim’s Perspective

For the average person, falling victim to a Cambodia-based crypto scam often starts innocently. You might get a message on WhatsApp or Telegram from someone claiming to have made huge returns investing in foreign exchange or cryptocurrency. They seem friendly, helpful, and knowledgeable. Slowly, they convince you to join their "exclusive" platform.

This platform looks professional. It has charts, live updates, and a user interface that copies Binance or Kucoin almost perfectly. You deposit $5,000. Your account shows it growing to $6,000, then $7,000. Encouraged, you deposit more. Maybe $25,000. Then, when you try to withdraw, the problems start.

Suddenly, you need to pay "taxes" or "verification fees." When you pay those, the withdrawal is delayed. Then frozen. Then, the support team disappears. Reddit discussions in r/Scams from September 2025 document countless stories like this. Victims report losing anywhere from a few thousand to hundreds of thousands of dollars. Trustpilot reviews for Huione-related services, before they were taken down, showed an average rating of 1.2 stars out of 5, with complaints about immediate account freezing and threats when requesting withdrawals.

The psychological manipulation is deliberate. Scammers build trust over weeks or months. By the time you realize it’s a scam, the money has already been moved through multiple layers of wallets and exchanges, making recovery nearly impossible.

International forces seizing illicit crypto networks

International Crackdowns and Recent Developments

For years, these operations operated with near impunity. But 2025 marked a turning point. The U.S. Department of Justice, in coordination with the U.K., launched one of the largest forfeiture actions in history. On October 14, 2025, they filed a civil complaint against the Prince Group, seizing approximately $15 billion in bitcoin. TRM Labs confirmed this as the largest forfeiture in U.S. history.

This wasn't just about taking back money; it was about dismantling the infrastructure. The DOJ complaint detailed how Prince Group used seemingly legitimate businesses-casinos, hotels, and retail outlets-to launder criminal proceeds. Internal communications revealed explicit references to "BTC laundering" and connections to "illegal banks and underground money houses."

Jeremy Douglas, chief of staff at the U.N. Office on Drugs and Crime, noted that thousands of people are working in these scam compounds, many trafficked into centers like those run by Prince Holding. The scale of the problem rivals the global drug trade in terms of gross profits, according to Jacob Sims, a visiting fellow at Harvard's Asia Center.

However, the crackdown hasn't eliminated the threat. Transactions with Huione continued to grow into 2025, suggesting these networks are adaptable. They are shifting tactics, using more decentralized methods and moving operations to other regions if pressure becomes too intense in Cambodia.

Comparison of Legitimate vs. Underground Crypto Operations in Southeast Asia
Feature Legitimate Exchanges (e.g., Vietnam, Thailand) Underground Networks (Cambodia)
Regulatory Status Licensed by national securities commissions Operates in gray areas or exploits new licensing loopholes
AML Compliance Strict KYC/AML protocols enforced Uses mixing services and shell companies to evade detection
Business Model Trading fees, spreads, staking rewards Fraudulent investments, ransom payments, gambling proceeds
Human Element Voluntary employment, standard labor laws Forced labor, human trafficking, physical coercion
Transparency Public audits, clear fee structures Fake platforms, hidden ownership, opaque transactions

Why Cambodia? The Perfect Storm

Why did this happen in Cambodia specifically? Several factors converged to create this environment. First, Cambodia is largely a cash-based economy with relatively weak financial regulation. It ranked 128th out of 180 countries in Transparency International's 2024 Corruption Perceptions Index. This lack of oversight makes it easier for illicit funds to enter and exit the formal banking system.

Second, its geographic location provides strategic advantages. Cambodia sits close to major cryptocurrency markets in South Korea and Southeast Asia. The proximity allowed for rapid movement of funds across borders. The 12.8 billion won in transfers from Korean exchanges highlights this connection. Criminals exploited the speed of crypto transactions to move money faster than regulators could track.

Third, the initial ban in 2019 didn't stop adoption; it just drove it underground. With 10.63% of the population still using crypto, there was a ready-made user base for scammers to exploit. They didn't need to educate people on how crypto worked; they just needed to trick them into trusting the wrong platform.

What Comes Next?

The future of underground crypto trading in Cambodia is uncertain. The $15 billion seizure sends a strong message: the world is watching. But criminal organizations are resilient. As Jacob Sims predicted, absent sustained multinational enforcement, these operations will continue to evolve.

We may see two diverging paths. One path leads to further decentralization. Criminals will likely move to more obscure blockchains or use advanced privacy coins to hide their tracks. They may also expand into neighboring countries with similar regulatory weaknesses, such as parts of Myanmar or Laos.

The other path involves gradual legitimization. The NBC’s exploration of a Central Bank Digital Currency (CBDC), announced in 2019, could eventually provide a safe alternative for citizens. If implemented well, a CBDC could reduce the demand for underground services by offering a regulated, accessible digital payment method. However, this transition will take years, and in the meantime, the black market will persist.

For individuals, the lesson is clear: if it sounds too good to be true, it is. Be wary of unsolicited investment advice, especially via messaging apps. Stick to well-known, regulated exchanges. And remember, no legitimate investment guarantees high returns with zero risk.

Is cryptocurrency illegal in Cambodia?

The status of cryptocurrency in Cambodia has changed. Initially, the National Bank of Cambodia (NBC) banned all crypto transactions in 2019 via Directive No. 1125. However, in late 2024, the NBC introduced Prakas B7-024-735 Prokor, which established a permission-based licensing system. This means crypto is no longer completely banned but is now subject to strict regulation. Despite this, underground and illicit activities remain widespread and are not covered by these licenses.

What is the Prince Group?

The Prince Group is a transnational criminal organization based in Cambodia, led by Chen Zhi. It operates large-scale scam compounds where trafficked workers are forced to commit cryptocurrency investment fraud. The group uses legitimate-looking businesses, such as casinos and hotels, to launder money. In October 2025, the U.S. Department of Justice filed a civil complaint against the Prince Group, leading to the seizure of approximately $15 billion in assets.

How does Huione Guarantee launder money?

Huione Guarantee (Huiwang Group) acts as a money laundering service provider for various criminal activities, including cyber theft, investment scams, and dark web transactions. It processes funds through multiple layers of transactions across different cryptocurrency exchanges to obscure the origin of the money. Chainalysis reports that Huione laundered at least $4 billion between August 2021 and January 2025. The group previously operated a 'one-stop crime platform' on Telegram before being blocked.

Can I recover money lost to a Cambodia crypto scam?

Recovering money lost to these scams is extremely difficult. Once funds are deposited into fraudulent platforms, they are quickly moved through complex laundering networks involving multiple wallets and exchanges. While international law enforcement agencies are seizing assets from major criminal groups like the Prince Group, individual victims rarely see direct restitution. It is crucial to report any suspected fraud to local authorities and financial crime units immediately, though expectations for recovery should be realistic.

Are scam compounds still operating in Cambodia?

Yes, despite recent crackdowns, scam compounds continue to operate. While the U.S. and other nations have seized significant assets and disrupted some operations, the underlying criminal networks are resilient. Reports from late 2025 indicate that transaction volumes with key laundering entities like Huione Guarantee continued to grow. These compounds often relocate or adapt to new encrypted communication channels to evade detection, maintaining their role in the global cybercrime ecosystem.

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